Philippines Economic Outlook

November 13, 2018

Economic growth slowed to a three-year low in the third quarter, but grew at a healthy pace nonetheless. A slowdown in private consumption reflected households’ loss in discretionary income caused by near-decade high inflation throughout the quarter and a contraction in remittance inflows growth in August. The government’s massive infrastructure overhaul continued to power robust government spending and fixed investment growth, which grew at double-digit rates in Q3. On the downside, the investment program is putting pressure on the external economy as imports skyrocketed in Q3, outpacing exports for the third consecutive quarter. Moving into Q4, business conditions improved in the manufacturing sector in October. Meanwhile, in other news, the country failed to receive bids from Thailand and Vietnam for a 203,000-ton import tender of rice in early November. As the world’s top importer of the grain, possible tighter supply could stoke inflationary pressures.

Philippines Economic Growth

The economy is projected to continue growing at a brisk pace over the medium-term. Domestic demand should remain the key driver of growth, propelled by sizeable infrastructure spending and a tighter labor market. Nonetheless, a weaker external position and negative spillovers from a protracted U.S.-China trade dispute could cast a shadow over growth prospects. Met the why particular panelists see GDP growth of 6.4% in 2019, which is down 0.1 percentage points from last month’s forecast, and 6.3% in 2020.

Philippines Economic News

Economic growth decelerated in the third quarter, with annualized GDP growth expanding 6.1%, a notch down from the upwardly revised 6.2% expansion recorded in the second quarter (previously reported: +6.0% year-on-year).

According to data released by Nikkei and IHS Markit, the manufacturing Purchasing Managers’ Index (PMI) rose to 54 points in October from 52.0 points in September, climbing further above the critical 50-point threshold that separates expansion from contraction in the manufacturing sector.
Accelerating output and new orders growth point to improved business conditions at the outset of the fourth quarter.

Sign up for our newsletter

Cookies Policy: We use third-party cookies to improve our services by analyzing your browsing habits.
By continuing to use this website you are giving consent to cookies being used. For more information on cookies and how you can disable them, see our "Cookies Policy".
Close